What is Notes On ASX ?

Notes On ASX is published after the close of trading on the Australian Stock Exchange. Essentially, via Notes On ASX, I am sharing my daily, broad market analysis homework.

Does Notes On ASX give trading advise ?

Readers won’t find any trade tips or suggestions on Notes On ASX.  I am not a licensed financial advisor and Notes On ASX is NOT intended to be advice on specific trades or investments.

So what is Notes On ASX about ?

Posts are written for the purpose of promoting and rationalizing market analysis methods and techniques. Notes On ASX expresses my personal opinion about  market movement based on my assessment of trends, identifying underlying strengths or weaknesses and recognizing market turns.

Can’t I just look up the indices published by the financial media ?

Market indices are calculated on market capitalisation. Such weighted indices systematically overweigh overvalued stocks and underweigh undervalued stocks. An index itself is a rough guidance about the general trend but a poor indicator to identify underlying strength or weakness.

Why is it necessary ?

The ASX-200, for example, consists of 200 companies listed on the ASX. In mid-2014 the four big banks, the two big retailers, BHP and Telstra jointly accounted for over 50% of the ASX-200. These are only 8 out of 200 stocks. So for as long as those stocks are going up, the index will go up.

Don’t stocks generally move together in the same direction ?

Usually small stocks are abandoned first by institutional investors while the large caps, those having a considerable weight in the index, are sold last. In this way, the index can still go up while the majority of stocks are already in a downtrend. Market Internals can therefore reveal a lot about the underlying strength or weakness in the Market and give warning signals for possible turns.

What does that help me in my trading ?

Understanding the Market Internals allows me to determine when to trade more aggressively or more conservatively or not to trade at all.

Why is subscribing Notes On ASX free?

We are trading the Australian and other markets. The ASX market assessment is part of our daily homework routine. With Notes On ASX we simply share our findings and hope it may help others.

When do you start charging for Notes On ASX?

We are not financial news publishers or offering services to the trading or investing community. We are private traders and making our money in the markets. Notes On ASX is simply ‘giving back’ or ‘sharing’. Once we start charging for Notes On ASX we probably failed as traders in which case you should not follow us anyway.

How do I use Notes On ASX ?

The first part of my post looks at price action in the bar chart of XJO, the ASX-200 Index. I am analysing trends, support and resistance levels and price/volume behaviour.

The second part looks at the ASX New High – New Low Index.

The Secondary Market Internals build the third part of my post. They give confirmation signals by either agreeing or disagreeing with the signals from the Primary Market Internals.

The fourth part are Market Breadth Indicators

Lastly, I conclude my posts with an overall analysis based on the above assessments.

See explanations of all the above indicators in the Toolbox section



IMG_2643Rolf was confronted with investment decisions when he sold his IT company in November 1999, just before the burst of the IT bubble. Developing his own software company and then becoming a General Manager within a large group characterised his earlier investment style in finding stocks below its intrinsic value by looking at balance sheets and income statements. Two bear markets later Rolf came to the realisation that the value of a stock is irrelevant when the sentiment is adverse. As a consequence he accepted the efficient market theory. His passion for the markets remains and his investment style became gradually more active. Rolf is married to Janice, a South African born Australian. They spend time in Cape Town, South Africa, Gold Coast Australia and Zurich, Switzerland. Both Rolf and his wife are private traders actively trading swings and managing trend-following positions in US, Australian and Swiss equity markets.